In this Thursday, Dec. 20, 2012, photo, Chet Kanojia, founder and CEO of Aereo, Inc., shows a tablet displaying his company's technology, in New York. Aereo is one of several startups created to deliver traditional media over the Internet without licensing agreements. Past efforts have typically been rejected by courts as copyright violations. In Aereo’s case, the judge accepted the company’s legal reasoning, but with reluctance. (AP Photo/Bebeto Matthews)

Photo: Bebeto Matthews, Associated Press

In this Thursday, Dec. 20, 2012, photo, Chet Kanojia, founder and...

Image 2 of 2

Miniature antennae, each belonging to an Aereo subscriber, at a warehouse in New York, Aug. 31, 2012. Because Aereo cuts off TV networks from the retransmission fees that they have grown used to, they are determined to shut down the service, which streams the network's free transmission to paying subscribers, â€” even, station owners say, if they have to take their signals off the airwaves. (Kirsten Luce/The New Yokr Times)

Photo: KIRSTEN LUCE, New York Times

Miniature antennae, each belonging to an Aereo subscriber, at a...

Controversial Aereo to bring Houston over-the-air TV to the Net in September

Aereo, a controversial startup that captures over-the-air tele­vision signals and streams them to subscribers over the Internet without permission from the sources, will launch in Houston in mid-September.

The service has been the target of legal challenges in each market in which it has launched, but so far it has prevailed in court. Broadcasters say Aereo is stealing and retransmitting their content without compensation. Aereo counters that, the way its technology works, the company is simply renting an antenna to its subscribers.

"Three federal courts have said what we're doing is legal," said Chet Kanojia, Aereo's founder and chief executive officer. "And the reason they've said that is logic."

Aereo goes live in the Houston area on Sept. 16 and will be available in a 20-county region. Customers will pay $8 a month to stream local broadcast channels over the Internet to PCs, smartphones and tablets.

The service also allows subscribers to store up to 20 hours of shows on Aereo's servers so they can pause, rewind and fast-forward video, similar to a DVR. For $12 a month, customers can store up to 60 hours.

Shows can be watched on most Web browsers; on iPads, iPhones and iPod touches; on Apple TV via the AirPlay feature; and on Roku streaming devices. Aereo says support for Android devices is coming later this summer, probably before the Houston launch.The Houston service will offer the broadcast signals from the major stations — KHOU, KTRK, KPRC, KUHT, KRIV, KIAH — as well as foreign-language and special-interest channels. The Bloomberg Television business channel also is available.

Aereo works by assigning a dime-size antenna to each customer. The fee is for leasing the antenna and the DVR service. Aereo doesn't pay broadcasters for the signals, saying that customers have the right to capture over-the-air shows for free, and the company is just renting out the hardware to do so.

That's upset broadcasters who see it as theft. It also threatens the relationship they have with cable TV companies. Comcast, U-verse, Time Warner Cable and others pay big money to broadcast networks to carry their programs, and broadcasters have come to rely on that revenue stream. If Aereo succeeds, cable companies might take the same approach to carrying local channels.

More Information

Coming soon to a county near you

Beginning Sept. 16, Aereo will be available to people living in the following counties:

Harris

Brazoria

Chambers

Fort Bend

Galveston

Montgomery

Waller

Austin

Calhoun

Colorado

Grimes

Jacinto

Jackson

Liberty

Matagorda

Polk

Trinity

Walker

Washington

Wharton

Source: Aereo

"I would be sure that Aereo is likely to license its technology to the cable companies," said Rich Greenfield, a media analyst with BTIG Research in New York who was briefed on Aereo's plans.

To the high court?

Aereo has prevailed in all its court challenges, Kanojia said. The most recent was in New York, where a federal appeals court ruled Aereo was not violating the copyrights of broadcast networks.

Expanding to Texas means Aereo is likely to be pulled into different courts, which may rule differently from the New York venue. Regardless, the plaintiffs in the case have vowed to appeal to the U.S. Supreme Court.

In April, News Corp. president Chase Carey told the National Association of Broadcasters convention in Las Vegas that its Fox broadcast network would consider abandoning over-the-air service and go subscription-only if lawsuits fail to shut down Aereo. His comments were echoed by executives at CBS and Univision.

Aereo, which is backed by Barry Diller and other venture capitalists, also has become a factor in a dispute in New York between CBS and Time Warner Cable. The two entities can't agree on how much Time Warner should pay to retransmit the network's shows, so Time Warner has removed CBS from its lineup in New York. Time Warner has suggested that its customers there sign up for Aereo if they want to watch CBS' offerings.

Cable companies also aren't completely comfortable with Aereo because it helps enable so-called cord-cutting, in which TV watchers cancel cable service and rely on streamed, a la carte content over the Internet.

Bigger satellite threat

But analyst Greenfield said the cable companies also are major Internet providers, so they still have a product to offer cord-cutters.

"It's a bigger threat to satellite operators. They don't do anything other than television," he said.

Although some satellite TV providers also offer Internet, "almost no one uses it," Greenfield said.

Houston is one of 22 markets into which Aereo plans to expand this year. Besides New York, it is also available in Atlanta and Boston, and it recently announced plans to launch in Chicago and Utah. Houston will be the first Texas city to get the service, which also launches in Dallas on Sept. 23.

Houston-area customers interested in the service can preregister at Aereo.com.